when is a law firm “national”? hub-and-spoke firm finds out

Posted on February 14, 2017 by rtushnet
Cochran Firm, P.C. v. Cochran Firm Los Angeles, LLP, 2016 WL
6023822, No. CV 12-5868 (C.D. Cal. Aug. 18, 2016)
Previous 9th Circuit opinion affirming earlier
unclean hands ruling discussed
here. This case began with a legal partnership turned sour. In 1999,
McMurray (principal of The Cochran Firm Los Angeles) joined The Cochran Firm’s
(TCF’s) Los Angeles office. McMurray claimed to have received a letter from TCF
principals Johnnie L. Cochran (now deceased), Givens, and Cherry,
congratulating him on his elevation to named partner. In 2007, McMurray
acquired TCF’s Los Angeles office, assuming all of its debts and obligations. He
organized the office under a partnership called The Cochran Firm Los Angeles (TCFLA),
formed with other parties Dunn and then adding Barrett.
TCFLA remitted a cut of its monthly case fees to TCF. Things
soured, and McMurray was allegedly shut out of the TCFLA partnership. TCF sent
a C&D to McMurray seeking to terminate his right to use the Cochran name.
Dunn allegedly took over the remains of TCFLA’s practice, changing its name to
The Cochran Firm California. TCF filed suit against McMurray and TCFLA. It
initially obtained a preliminary injunction, but the Ninth Circuit remanded for
consideration of whether TCF had unclean hands. The district ultimately
dissolved the preliminary injunction after determining that TCF had unclean
hands in the use of its trademark “because it improperly held itself out as a
national law firm.”
Here, the court gets rid of a bunch of TCFLA’s tortious
interference claims, but finds that a reasonable jury could find that TCFLA
parties had standing to seek cancellation of TCF’s registered mark “THE COCHRAN
FIRM.” Even though McMurray wasn’t currently using THE COCHRAN FIRM mark, and
testified that he had no present intent to do so, he also testified that he “may
change that depending on the outcome of this case.” McMurray established “a
real and rational basis for his belief that he would be damaged by the
registration sought to be cancelled, stemming from an actual commercial or
pecuniary interest in his own mark.” TCF’s mark “prevented McMurray from
advertising his relationship with Johnnie Cochran to the public.”
Lanham Act counterclaim: This counterclaim was based on TCF’s
website, which featured statements such as “America’s Law Firm,” “Experience
Trial Lawyers Who Deliver Results,” “With offices nationwide and a team of some
of the country’s most experienced and aggressive personal injury attorneys and
criminal defense lawyers,” and “While The Cochran Firm is a national law firm
with multiple attorneys, we handle each case we take with equal dedication and
tenacity. Your attorney may draw on the collective experience of his or her
partners, but will continue to work personally with you throughout all legal
proceedings,” and included a list of offices from around the country.
The court found that these statements were literally false;
no further evidence of consumer deception or materiality was required. Though TCF
“market[ed] itself as a traditional, national firm with regional offices around
the country,” the firm’s structure more closely resembled a network of several
partnerships, connected only through their relationship with TCF. “Semantic
quibbling” over the prospect that national might not mean “single” was
unpersuasive.
The McMurray parties also provided sufficient evidence of
damages: McMurray testified that, despite having retained TCF’s original Los
Angeles telephone number, he now receives significantly less of the types of
cases that he typically got at TCFLA. Though this was “quite weak” evidence,
given that a new law firm might reasonably get a lot less business than an old
one, that was enough to show a triable issue on injury.
However, the court rejected counterclaims against the Dunn
parties (TCF-CA) based on statements such as “Welcome to The Cochran Firm,
Founded over 40 years ago by Legendary attorney Johnnie L. Cochran, Jr.,” “The
Cochran Firm has grown to encompass 27 offices in 16 states around the country,”
and “The Cochran Firm Los Angeles has been in the same location for 25 years,
and remains committed to upholding Johnnie’ vision of ‘a diverse law firm which
reflects society and is capable of handling cases throughout America.’ “ These
claims weren’t literally false, and they were “much vaguer and more ambiguous”
than the literally false claims by the other parties.
To show deceptiveness, the McMurray parties offered multiple
court records in which former clients sued both TCF and a TCF-affiliated
regional office for judgments owed, and an expert report analyzing those court
records. The court found this evidence probative of deceptiveness, since it
showed that, in multiple instances, former TCF clients attempted to collect
monies owed from both TCF and an affiliated regional office under the
assumption that they were one and the same. However, the McMurray parties
failed to show materiality. Though there was evidence that consumers were
deceived into believing that TCF was a “national” firm, there was no evidence
that a consumer would choose TCF-CA over another law firm such as McMurray’s
new law firm “out of some misplaced belief that TCF-CA had Johnnie Cochran’s
imprimatur.”
McMurray also counterclaimed for violation of his right of
publicity because TCF or TCF-CA used his image and biography on websites
without his consent, using it to draw business. However, the court found no
evidence of injury, as required to recover [note that courts will usually
double-count benefit to the defendant as injury to the plaintiff where the
plaintiff is a celebrity]. Broad statements by McMurray that he believed he’d
been injured weren’t enough to show injury.

California UCL: Although the underlying conduct above could
found a UCL claim, the only available remedy was restitutionary (since the
McMurray parties weren’t seeking injunctive relief). And the evidence of
economic harm—possibly lost clients—didn’t support a claim for restitution. Such
damages were “exactly the sort of damages that cannot be achieved via a UCL
claim.”

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pool party: lawsuit raises survey and TM priority issues

Posted on February 14, 2017 by rtushnet
Solar Sun Rings, Inc. v. Secard Pools, 2016 WL 6138294, No.
EDCV14-2417 (C.D. Cal. Jan. 20, 2016)
Illustrating the principle that those who sue competitors should be sure to have their own house (or in this case, pool) in order: The parties compete in the market for heated pool covers. SSR
sued Secard for trademark infringement, leading to false advertising/unfair
competition counterclaims based on SSR’s allegedly false statements about the
effect of “mini magnets” used on its products and the water and chemical
savings caused by its products. The “coverage calculator” on SSR’s website also
allegedly deceived consumers into thinking that choosing SSR’s products would
be cost-effective because it falsely advised consumers to purchase less product
than they would eventually need to heat their pools.
The court found that, even assuming falsity, there were
disputed issues about materiality and harm. Secard’s expert report opined that
3.33% of SSR customers were deceived by SSR’s allegedly false statements and would
have purchased Secard’s competing product had the false statements not been
made. Although Downey, the expert, had 35 years’ experience in the swimming
pool industry, he had no other expertise about consumer behavior and related
fields. Still, that was okay because he had relevant experience catering to the
preferences of pool product consumers. He conducted discussions with “swimming
pool industry leaders” and estimated that roughly twelve percent of consumers
are familiar with SSR’s product, while roughly one percent of consumers were
familiar with Secard’s product. He then conducted phone and personal
conversations with “leaders in the swimming pool industry, people who work in
swimming pool stores, mass distributors and manufacturers, industry legal
counsel, pool service technicians, pool builders, buying groups and pool
remodeling companies.” He estimated that roughly 40% of consumers who bought
from SSR had been diverted from competing products, such as Secard’s, yielding
3.3% diversion. Survey evidence “should ordinarily be found sufficiently
reliable under Daubert” because “unlike
novel scientific theories, a jury should be able to determine whether asserted
technical deficiencies undermine a survey’s probative value.” This survey might
be “technically lacking,” given that “his sample size is limited and it is not
entirely clear how he derives his estimates from the data he provides,” but the
court declined to exclude it.
Solar Sun Rings, Inc. v. Secard Pools, No. EDCV14-2417, 2016
WL 6139615 (C.D. Cal. Jan. 13, 2016)
This is a trademark ruling in the same case. SSR began
selling passive solar heating products for pools and spas under the name “Solar
Sun Rings” in 2003. Secard has been selling pool products since 1958. In 2011, Secard’s
CEO created Solar Sun Squares, which he designed to compete with Solar Sun
Rings, and registered solarsunsquares.com. In 2013, SSR caught wind of Secard’s
intent and attempted to register a trademark for “Solar Sun Square,” then sent
Secard a C&D that prompted Secard to change the name of Solar Sun Squares
to “Solar Heat Squares.” SSR then began selling Solar Sun Squares the month
after Solar Heat Squares launched in 2014.
Solar Sun Rings

Solar Heat Squares
Solar Sun Squares

Secard argued that, as the senior user of Solar Heat
Squares, it couldn’t infringe on Solar Sun Squares. However, SSR argued that it
should be able to tack its rights and claim priority. This is usually a matter
for a jury. Given that Solar Sun Rings and Solar Sun Squares were written in
the same font and the same color, on the same sized package, over the same four
images encased in the shape described in the mark, and that the products were
identical except for shape, a jury could find that the marks had the same
connotation. Plus, a jury could find that the “aural appearance” of the marks –
“three short, alliterative words (two of which are the same word) – evoke the
same mental reaction.” (Of course, to the extent that tacking occurs on the
basis of visual elements of the mark, the similarity inquiry will also have to
take visual elements into account.)
There was also enough evidence to go to the jury on likely
confusion, given the similarity of the products and the purchasers. The court
gave a very broad reading to the intent factor, ruling that “[a] jury could
reasonably infer that Secard intended to confuse consumers by improving upon
Plaintiff’s pre-existing product with a similarly-named product.”

However, Secard got out of the trade dress infringement
claim. SSR argued that its infringed trade dress was its color scheme, characterized
by “a sequence of several colors (red, yellow and orange) depicted against the
distinct blue backdrop of SSR’s products, and displayed in a highly distinct
dot-matrix style of color printing and color shading.” SSR alleged that Secard’s
use of a sun design bolstered its infringement claim. But “Secard was already
using the allegedly infringing color scheme along with an image of a sun in
1993, well before Plaintiff went into business in 2003.” Without priority of
use, SSR couldn’t win. “To hold otherwise would allow a junior user to employ
litigation as a means of forcing a senior user to abandon a trade dress which
predates the junior user’s existence.” [Interesting conceptual question: if the
trade dress was in use but hadn’t developed secondary meaning, and the junior
user then came along and developed secondary meaning, what then? Of course, the
junior user’s ability to develop secondary meaning would itself suggest lack of
confusion with the existing trade dress, whether or not that prior trade dress
could be the foundation of any affirmative rights.]

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Juxtaposition is transformative for RoP purposes, divided court rules

Posted on February 14, 2017 by rtushnet
Daniel v. Wayans, No. B261814 (Cal. Ct. App. Feb. 9, 2017)
Pierre Daniel, an actor, worked as an extra for a day in A
Haunted House 2. Marlon Wayans co-wrote, produced, and starred in the movie.
Daniel sued Wayans and others, alleging that he was the victim of racial
harassment because during his one day of work on the movie he was compared to a
Black cartoon character and called “ ‘[n]igga,’ “ and also alleging violation
of his right of publicity. Wayans moved to strike Daniel’s claims against him
as a SLAPP suit; the trial court agreed and the court of appeals affirmed.
Over a dissent, the court of appeals agreed that the conduct
at issue was part of the “ ‘creative process’ “ inherent in making the movie,
and thus involved free speech/an issue of public interest. Wayans also tweeted
about Daniel’s appearance, comparing him to the Simpsons’ Cleveland Brown. Given
that Daniel was an extra on the film, which was made by a popular producer and
was a sequel to a successful film, advance information about the film was a
topic of public interest. The post “contributed to the public ‘debate’ or
discussion regarding the film by giving fans and those interested a glimpse of
someone in the film.”
 

screencap of tweet
Daniel’s claims for statutory and common law
misappropriation of name and likeness were based solely on the tweet; again,
over a dissent, the court of appeals held that he couldn’t show a probability
of prevailing, as necessary to overcome the anti-SLAPP motion. First, he failed
to overcome evidence that he waived his claims when he signed a broad release
consenting to the use of his image in connection with the movie. Second, the
use was transformative. The court called the test “straightforward”: “whether
the celebrity likeness is one of the ‘raw materials’ from which an original
work is synthesized, or whether the depiction or imitation of the celebrity is
the very sum and substance of the work in question.” New expression alone is
sufficient; it need not convey any “ ‘meaning or message.’ “ Though Wayans used
two unaltered images, he juxtaposed them and added “arguably humorous” comedy,
adding “an element of caricature, lampoon, or parody.”
[Just to be clear, the implication is that tweets that aren’t
transformative, and don’t involve juxtapositions, may infringe the right of
publicity. Consider that the next time you see a brand tweeting something
related to recent celebrity news.]
Daniel’s false light claim failed because the tweet referred
only to Daniel’s physical resemblance to the Cleveland Brown cartoon character.
It was a combination of an “expression of an opinion by Wayans that Daniel
looked like Cleveland Brown and an accurate photographic comparison.” That wasn’t
offensive enough, and it didn’t imply any further comparison to Cleveland
Brown.
Judge Liu, whom I respect a great deal, unfortunately
dissented; he would not have found the use transformative as a matter of law:
Wayans used Daniel’s photo not as
raw material for an original work, but as a literal depiction of Daniel’s
appearance and a literal depiction of the appearance of cartoon character
Cleveland Brown. Wayans simply repackaged the two images together and added a
caption remarking upon the resemblance of the two. This was not a
transformation that was primarily Wayans’s own expression.

Sigh. Among other things, what does that mean for a
republisher of a transformative work, which isn’t the republisher’s “own
expression”? This inability to agree on relatively simple situations shows the
instability of “transformativeness” in the right of publicity context.

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Lexmark’s harm requirement shields XYZ’s comparative claims

Posted on February 13, 2017 by rtushnet
Verisign, Inc., v. XYZ.com LLC, No. 15-2526 (4th Cir. Feb.
8, 2017)
Verisign sells internet domain names and operates the
popular .com and .net top-level domains. In 2014, XYZ launched “.xyz,” a new
top-level domain. As part of its marketing push, XYZ, and its CEO Daniel Negari,
touted the popularity of the .xyz domain and warning of a scarcity of desirable
.com domain names. Verisign for false advertising, and here the court of
appeals affirmed the district court’s grant of summary judgment.  Verisign couldn’t show that XYZ’s
self-promoting statements caused it harm, and its statements about the
availability, or lack thereof, of  .com
domain names weren’t shown to be false or misleading.
XYZ made “a series of affirmative statements about .xyz,
promoting .xyz’s popularity and touting its high registration numbers.” For
example, by August 2015, XYZ had secured over one million .xyz registrations.  Although this was literally true, Verisign
argued that it was false or misleading because the numbers included not only
registrations bought and paid for by consumers – indicating actual consumer
demand – but also 375,000 registrations given away for free through an
agreement between XYZ and Web.com.
Also, Verisign challenged statements such as, “All of the
good real estate is taken. The only thing that’s left is something with a dash
or maybe three dashes and a couple numbers in it.” Another statement was that
“nine out of ten .com searches show up as unavailable.” A YouTube ad compared a
new Audi with a .xyz license plate to a dilapidated Honda with a .com plate,
and stated, “With over 120 million .coms registered today, it’s impossible to
find the domain name that you want.”
“[A] Lanham Act claimant may not mix and match statements,
with some satisfying one Lanham Act element and some satisfying others.”  Verisign argued that XYZ used deception to
create the appearance of a “gold rush” for .xyz domains, including claiming
that NPR had dubbed it the “next .com.”  The court of appeals affirmed the rejection of
these claims based on Verisign’s failure to prove “an injury flowing directly
from the challenged statements”—hellooo, Lexmark.  Verisign’s harm expert was excluded because
her methods were “questionable” and her conclusions were “not reliable,”
primarily because her analysis failed to distinguish between correlation and causation.
 Her testimony was properly excluded;
that left Verisign with nothing.  While
her report showed that Verisign experienced a drop in .net registrations after
.xyz – along with other new top-level domains – became available, it didn’t
show “anything other than a temporal link between XYZ’s statements and the
drop-off.”  This failure wasn’t
surprising, since “XYZ’s boasts about its registration numbers and NPR
interview were distributed to a narrow audience, comprised mostly of readers of
XYZ’s blog and a small percentage of registrars.”  This gave them “limited potential to influence
the domain-name market, particularly at a time when hundreds of new top-level
domains were clamoring for attention in a newly competitive market.”
The court of appeals then agreed that claims that “all of
the good [.com] real estate is taken,” or that it is “impossible to find the
domain name that you want” were nonfactual opinion or puffery.  The statement that it is “impossible to find
the domain name that you want” wasn’t verifiable, in part because of “the indefinite
nature of the referenced ‘you.’” 
So too with the claim that “[a]ll of the good real estate is
taken,” because what a “good” domain name is, is a matter of opinion. Verisign argued
that the next sentence in the relevant interview – “The only thing that’s left
is something with a dash or maybe three dashes and a couple of numbers in it” –
was literally false, because there were at least some available .com names that
didn’t include dashes and numbers. But in context, the overall message was an
opinion that the available .com names weren’t “good” because they involve
dashes and numbers. 
While XYZ’s CEO claimed that these were the “only” .com
names left, “that is precisely the kind of puffery or bluster on which no
reasonable consumer would rely,” especially in a spoken statement, which might
be offered more casually than a written statement.  In such statements, “we must take care not to
label as ‘literally false’ what really is no more than a colloquial
exaggeration, readily understood as such.” 
In a footnote, the court of appeals pointed out that Verisign argued
that the relevant market was registrars who purchase domain names and then
resell them to end users, making it “especially unlikely that these savvy
industry players would construe XYZ’s claims about .com availability as factual
statements and rely on them accordingly.”

The claim that “99% of all registrar searches today result
in a ‘domain taken’ page” was verifiable, but verifiably true. Verisign argued
that this number was a “naïve” metric of unmet demand because it included automated
searches undertaken by registrars looking for high-demand, previously
registered domain names. The court of appeals wasn’t convinced—given that
registrars were battling “fiercely and on a daily basis over a limited supply
of desirable .com names,” the statistic seemed to convey the difficulties of
registering a .com name.  Anyway,
Verisign didn’t provide a consumer survey about reactions to this claim, nor
did it provide any other evidence of deceptiveness.

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Challenging materiality when literal falsity is conceded

Posted on February 13, 2017 by rtushnet
Smart Vent, Inc. v. USA Floodair Vents, Ltd., 193 F.Supp.3d
395 (D.N.J. 2016)
Smart Vent alleged patent infringement and false advertising
related to competitor Floodair’s flood vents, which it allegedly falsely
claimed to be certified by various bodies. 
The regulations at issue, however, requried only certification, not
certification by specific parties; the real question was whether Floodair falsely
or misleadingly described its product as certified in accordance with a
standard known as TB-1. 
As a matter of law, the court determined that TB-1 called
for an individual certification different from that provided by Floodair. Thus,
the court granted partial summary judgment on falsity, but refused to find materiality
or harm to Smart Vent without further evidence. 
“While there is a reasonable inference that USA Floodair’s
misrepresentation that its product complies with TB-1 led to increasing its
sales and decreasing Smart Vent’s sales, that inference is unavailable to Smart
Vent as the movant in its summary judgment motion.”  The parties also agreed that appropriate
certification decreases flood insurance premiums, which “creates at least the
impression that certification-related statements would influence purchasing
decisions,” but that still left a triable issue.  Floodair provided some evidence that other
aspects of its product, such as cost effectiveness and ease of maintenance,
could also drive sales. 

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Alleging that unauthorized reseller sells old product defeats first sale defense

Posted on February 13, 2017 by rtushnet
Unite Eurotherapy, Inc. v. Walgreen Co., Case No.:
16-cv-01706, 2017 WL 513008 (S.D. Cal. Feb. 7, 2017)
Unite sells boutique hair care products through authorized
resellers and its own website. Unite alleged distribution agreements with all
of its resellers, allowing those resellers to make sales only through limited
channels and prohibiting those resellers from selling its products through
online or internet channels. Since about August 2010, its distribution
agreements contained an Anti-Diversion Agreement prohibiting resellers from
selling “Product to persons or entities purchasing Product in bulk” or to “any
diverter or redistributors of products or to any other person or entity
reasonably believed to be purchasing Product for subsequent sale,” as well as
related provisions. 
Unite sent defendants C&D letters informing them of
these agreements and that its online sales of Unite were unauthorized.
Defendants continued to sell the products on walgreens.com, allegedly resulting
in the loss of two accounts and numerous other existing clients threatening to
drop the brand.

The court found that intentional interference with contractual relations was
properly alleged, even though Unite didn’t identify the specific third parties
who’d been induced to violate their agreements, because it sufficiently alleged
that all its distributors were bound and that Walgreen knew that because Unite
told it.
Unfair competition/trademark infringement: Defendants
pointed out that the first sale doctrine exists.  But there’s a quality control exception: “Where
the distribution of a product that does not meet the trademark holder’s quality
control standards results in the devaluation of the mark by tarnishing its
image,” the non-conforming product is deemed not genuine and infringing. The
question is “whether the public is likely to be confused as a result of the
lack of quality control,” because of a hard-to-detect defect in the product.
Unite’s first theory, that consumers would likely be
confused into believing that the sales were authorized by Unite, was barred by
the first sale doctrine.  But Unite also
alleged likely deception about the quality of the product, “because the
unauthorized sales are dumping old product of degraded quality into the
marketplace.” Thus, the quality control exception applied.  Comment: How can this be sensible?  Unless Unite reclaims old, unsold product—which
allegations the court didn’t mention—then authorized products can be just as
old. The allegations the court mentioned were that Unite engages in extensive
product testing (pre-sale), and that it carefully chooses salon sellers to keep
the products off of others’ online sites, because online retail sites tend to “
‘dump’ products that have been sitting on shelves or in warehouses for too long
and therefore of lesser quality.”  But
all products age; I don’t see how these allegations survive the
first sale doctrine.

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calling a rival “imitation” is neither defamatory nor confusing

Posted on February 13, 2017 by rtushnet
Baltimore Sports & Social Club, Inc. v. Sport &
Social, LLC, 2017 WL 526499, No. 16–cv–02953 (D. Md. Jan. 6, 2017)
 

BSSC logo

Sport & Social logos

BSSC initiated suit, claiming that Sport & Social’s use of the marks BALTIMORE SOCIAL and BALTIMORE SOCIAL SPORTS, the yellow and black colors and the Maryland State flag were likely to cause confusion.  Defendant Sport & Social counterclaimed against BSSC for
a declaratory judgment of noninfringement, as well as for tortious interference,
false advertising, and related claims. The parties compete in recruiting individuals to play sports
on company-organized teams.  BSSC
allegedly began telling current and prospective customers that it was an “imitation”
social league, and at the February 2016 Sport and Social Industry Association
conference attended by both parties, a BSSC principal wore a t-shirt at with
the phrases: “BSSC, It’s the Real Thing,” and “DON’T BE FOOLED BY
IMITATIONSocials,” with the last word in the “same font and style” as Sport
& Social’s logo which contains the phrase “BALTIMORESocial.” They also allegedly
displayed the same slogan on a banner at an event at Camden Yards for opening
day of the Baltimore Orioles’ 2016 season, and put a picture of this banner on
BSSC’s Facebook page.
 

“imitation” banner

“imitation” T-shirt (PS: does Coke have an issue with “it’s the real thing”?)

Also, “[o]n separate occasions throughout the summer of
2016,” BSSC allegedly “occupied” fields at Patterson Park where Sport &
Social had planned sporting events for its customers. BSSC employees allegedly were
“hostile and rude” and “refused to leave the fields, causing disruption and
delay to Sport & Social’s planned events.”
Defamation: BSSC allegedly defamed Sport & Social by
calling it an “imitation” social league.  This couldn’t be defamatory because “imitation”
is a “rhetorical statement” that lacks precision and cannot be “proven as a true
or false statement of fact.” 
Verifiability, or the lack thereof, is the key.  Even if “imitation” is shorthand for
“counterfeit,” in this context, it was precisely the type of “loose,
figurative, or hyperbolic” language protected by the First Amendment. Even if
the evidence proved that the companies were substantially similar, that wouldn’t
prove that Sport & Social was an “imitation” of BSSC.  Because defamation was the “independently
wrongful or unlawful” act underlying Sport & Social’s tortious interference
counterclaim, that went too. The non-factual nature of “imitation” in this
context also ended the Lanham Act counterclaim.
Only a consumer has standing under the Maryland Consumer
Protection Act to challenge unfair and deceptive trade practices.

Finally, Sport & Social alleged that BSSC’s use of the “IMITATIONSocials”
logo was likely to cause confusion with “BALTIMORESocial.” Though likely
confusion usually can’t be resolved on a motion to dismiss, “a conclusory and
‘formulaic recitation’ of the elements of a[n unfair competition] cause of
action is insufficient.”  Here, that was
all Sport & Social had. (By contrast, BSSC’s initial complaint alleged
various instances of “[a]ctual [c]onfusion” including players who thought they
were playing in BSSC leagues when they were playing in Sport & Social
leagues and email inquiries from Sport & Social players regarding
scheduling for soccer, a sport not offered by BSSC.) Not only was Sport &
Social’s pleading minimal,  “the whole
point of the statement is to draw a distinction between the two entities,”
rather than to propagate confusion. 

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WIPIP, part 5

Posted on February 11, 2017 by rtushnet
Zvi S. Rosen, The Lost (and Found) Copyright Records
Before July 1870, copyright registrations were at each
federal district court.  Form of oath
dictated by statute; also deposited title page. 
Deposit records; assignment records; indexes; misc. other records.  Process: register by signing oath at local
district court as author/proprietor; have to deposit in DC. Until 1831, had to
provide notice  by publishing in local
paper for 4 consecutive weeks. 1802: added notice on works.  Almost no one did the newspaper publishing,
as far as he can tell.  Most records held
at rare book room of Library of Congress. 
Many missing records.
B/c title page deposit was completed before publication, it
was often the only part to survive if the book was never published.  About 30% of the deposits are these ghost
books.  For some jurisdictions, only the
title pages and not the other records survive. 
DC: Good records of deposits exist for much of the period, but most
books weren’t deposited, so it’s a spotty record. 
List of non-standard registrations up to 1861, being product
labels etc.—handwritten.  Many records
were assumed lost, but ended up in regional divisions of National Archives.
Digitized all and will host at GW law. 
Goals: locate old records; crowdsource local transcription;
combine transcribed data to get a continuous record of registration for 1790 to
now.
RT: What did they think they were doing with records of
registrations?  Was there a larger
plan?  Especially interested in that
non-standard registration list—were there associated proposed reforms.  But overall: Compare to property records,
contract doctrine about reading terms: what is the importance of requiring
notice when the required steps will generally not serve to provide actual
notice?  Symbolic notice: a statement
that I know what I’m doing?  Rare chance
that someone will actually search the records before acting?  W/real property title, you’ve incentivized
the creation of intermediaries that actually perform the necessary checks—doesn’t
seem to have happened in © for many uses.
A: notice was always half-baked. They knew newspaper notice
wasn’t working and kept it in the statute for 40 years.
Q: got rid of newspaper notice in 1831 for new
registrations, but kept it for renewals.
A: technically kept until 1909. Not much legislative history
about 1831, but interesting to know why they kept it.
Silbey: Institutional memory in © registers—whether the
people who worked there worked there for a really long time, as civil servants
tend to do. 
A: it was the clerks of district courts, which was a
patronage job, about ten years. Sometimes a deputy clerk if there were multiple
courthouses.  The administrative head of
the court, but that might be the only person who worked there, maybe not even a
fulltime job.  NY had a whole
infrastructure, including a dedicated © person, with printed forms.  Delaware had 50 © registrations for 70 years—they
just handwrote them.
Very little © litigation before 1830s.
Will Slauter, Copyright Law and Registration Practice: The
Case of News, 1870-1918
Example: Wanted registration as a book, not a print, because
they wanted to sue for infringement even though it was a weekly.  Political and cultural resistance to the very
idea of owning news—18th century to today. Registration records are
used more by literary historians than lawyers—filled in gaps where no copy
survives; teach us about the use of © by particular authors; trends in
publishing.
Registration had to precede publication, which was hard for
news.  Also, what do you register—a dispatch?
These registrations, if done, were of questionable validity for a long time.
1829: Clayton v. Stone, no copyright for price current (updates on market news)—suggested
no © for newspapers, but not clear. In 1884, effort to legislate 8 hours ©
automatic; defeated. 1886: Harpers Weekly sued; newspaper could qualify as a
book under the statute, but considered an illustration so was less useful for
written news.  1900: Tribune v. AP: can
register, but lots of stuff in a newspaper isn’t covered anyway.  1909 Act: newspaper copyrightable, but only
the copyrightable matter—not the news.
1850s: seeing more registrations of individual articles, and
whole Harper’s Weekly every week.  Serial
fiction; history; politics; biography—but what about news?  1830s, attempt to legislate special © for
news in Britain; not a response to tech but to political economy, since up
until that time newspapers had a stamp duty that artificially kept prices high.
Entrenched papers invoked fear of flood of pirate papers.  1880s in US: rise of cooperative press
associations, news © proposed in US as national news organizations began to
integrate.  AP, and United Press—thinking
about a direct rival, AP leadership pushed for special © and didn’t get
it.  That didn’t stop them from
registering news articles as books. 
Colorado News & Press Ass’n found its news copied by a news thief, a
slick fellow who repacked their news for his own customers. They threatened to
sue, but he said news couldn’t be ©.
INS v. AP: Citing Nat’l Tel. v. Western Union, AP argued
news couldn’t be copyrighted.  But what
hasn’t been noticed before is that the AP had used © in the past, such as
Spanish-American war, and did so again in months leading up to INS. Registered
16 selected news stories—seems like effort to set up test case.  You might say this doesn’t matter.  Didn’t come up in the proceedings, even
though much of the debate was about whether news, once printed w/o ©, was
abandoned to public. If anyone had noticed that AP was registering and arguing
that © was impossible, that would have seemed hypocritical, but the majority
didn’t even accept the argument that © was impossible—it was possible for the
literary form, not the underlying facts, which is what the AP wanted.

Why do these records matter? Complement to history of legislation and case law—how
historical actors sought to use © and to what effects.
Silbey: administrative agencies often drive debates or reify
lines drawn from inside out; this is not a standard story of bureaucracy.
A: there’s probably a change after 1898, when the new
register does want to impose a bit of order on the chaos.
Zvi S. Rosen & Saurabh Vishnubhakat, An Empirical Study
of U.S. Copyright Registration and Renewals, 1870-1977
Until 1897 there were statistics in annual reports; then
they moved to a new building.  1891:
Catalog of Copyright Entries. That included statistical info from 1903; 1909
started listing renewals separately. 1947: richer statistical information.  Computerized since early 1970s; form basis of
public database of all copyright registrations and renewals filed since 1978.
Authors almost always registered around the time of
publication.  This can be checked by
comparing registration date to renewal date.  Over 95% registered b/t 27 and 29 years before
renewal was filed.  In 1992, dropped but
only to above 90%, and then in the last year a bunch of people tried to
register and renew at the same time. When renewal became optional, absolute #s
of renewals dropped.
Are the annual reports statistically effective for comparing
registrations to renewals?  All based on the
fiscal year, not the calendar year, for registrations, even though all the
renewal data is per calendar year. 
Large volume categories—books, periodicals, music, artwork.
Artwork peaks 1909, and only got back to that level by the 1970s. Books peaked
in 20s, dipped, then steadily up.  Music
and periodicals: steadily up.  Small
volume: dramatic works and lectures go up, then dip a lot.  Photographs: people registered motion
pictures as photos until 1920s, but still huge drop from 1000s to under 100 in
the 50s.  Panics in economy create small
dips.
Renewals: books go steadily up; motion pictures small but
still show up.  Total renewal rate by
registration year goes somewhat steadily up until renewal becomes optional,
which is a cliff.  Music: renewal rates
35-40%; motion pictures very high—the only one over 50%. Books peak for
original registrations in the 40s. 
Periodicals go up and then plateau when the renewal term becomes 47
years.  Artwork: definite jump that
steadies when renewal term becomes 47 years. 
Music is volatile, but high for works created in 1910s and 20s; goes
back up for works in 40s and 50s. 
Renewal rate for 28+28 term, 12%; extending 15%; to +47 up
to 18%; then downwards when optional, even when renewal term increased to +67.
Can do event studies to see if new Register or legal changes
map onto anything.
D.R. Jones, Edicts of Government: Copyright in State Legal Materials
Compendium: policy, won’t register a gov’t edict issued by
state in other jurisdiction, including legislative enactments, judicial
decisions, administrative rulings.  States
are nonetheless making claims of copyright. 
Some discussion in runup to 1976 Act; decision not to put specific
coverage in though some people claim that’s b/c it’s covered already.

Open access, right to access law as part of access to
justice. But what does access mean?  Is
searchability required?  Access to
justice literature talks mainly about forms, but the law itself is also
important. State has duty; doesn’t need incentive to publish.  But states induce publishers to publish by
claiming ©/exclusive copyright.  This is
the law: a factual issue.  The concern is
one for authentication.  

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WIPIP, part 4

Posted on February 11, 2017 by rtushnet
Mark McKenna & Jessica Silbey, Investigating Design: An
Empirical Study of Industrial Design and IP Protection
Interviews & institutional analysis. Hypothesis
generating—anti-copying/copying practices, etc.
Buccafusco: consider who’s in the sample—don’t limit to
self-identified designers. Following career trajectories of design school grads
is one path but also consider other people who ended up doing design, like UX
design for websites.
Q: if you start w/ academic grads you may get rhetoric that
doesn’t match reality.
Silbey: a risk w/snowball studies; you have to ask carefully
for people who see things differently.
Q: interviews will difffer over whether you’re trying to
understand how design patents work in daily life v. what should be the system—studies
of successful design innovations?
McKenna: we want to know how people do design; incidentally,
we want to know how they’re thinking about law and how the legal system works
for them; we want to know about TM, ©, design patent but as a feature of their
work.
Lunney: studying what’s not there is hard—is there an
absence of market support for something that IP could help with?
Dogan: compare here w/Europe—is the thought process of
designers different w/an assumption of robust protection?  Also interesting to interview the designers
who copy—an entire industry in fashion & other design industries.
Silbey: The difficulty is how to disentangle what people
think they’re supposed to say about homage, about distinguishing themselves,
from the rules we know they play by. It’s cultural as well as legal.
McKenna: industrial design is all copying: they start w/a
design that exists in the world and try to tweak it. May get different kinds of
thinking about that question v. clothing. 
[Doesn’t clothing exist in the world? 
A functionality issue, perhaps.]
Sarah Burstein, The “Design” in Design Patents
Radical but unrecognized shift in the types of design we
think are patentable. Most designers think design is methodology, process, not
a thing, so it’s not surprising to see change. 
Two least favorite CCPA decisions by Judge Rich—history undermines
assumptions of practitioners.  19th
C. patent office rabbit hole: what did “article of manufacture” mean in
1877?  It took a lot.  Projects: Article of manufacture piece is
coming out soon; current talk; then partial designs.
Courts have read “new” & “original” out; subject matter:
“ornamental,” “design,” “for an article of manufacture.”  For 19th c., there was a big list,
changed in 1902 to current language. No matter how the language changed, courts
interpreted it the same: two classes of designs, shape and ornamentation. Shape
is the outward form or contour. 
Ornamentation is the surface illustrations/delineations things printed
or pressed into surface; cut glass contours for bottle.  You could claim one or both.  It was the whole article.  Ex parte Pope: tried to claim entire
configuration of seat riser as well as a portion thereof; PTO said you couldn’t
do that; it had to be the
configuration. This persisted after the 1902 Act.
Today: PTO says it’s any visual characteristics applied to
an article, which is a lot broader.  Use
the same language of configuration or shape & ornamentation.  But now we see people claiming fragments of
shape or fragments of ornamentation. 
What happened?  They say surface
ornamentation but they’ve expanded it to “surface treatment”—that opens up a potentially
broad range, including computer icons; contrasting color or materials; anything
else on the surface—golf club face scoreline pattern—that’s certainly not
ornamentation.
What happened?  Judge
Rich.  In re Hruby, 1967.  1952 Act was pretty clearly not trying to
change stuff for design patents. But when Rich gets this case for the patterns
of water shot out of a fountain—not the machinery, but the water sprays—the PTO
says nope, that’s not a design for an article of manufacture and the PTO
reverses.  Article means anything made by
man, and the sprays of water are made by man. 
Technically about different subject matter requirement but important b/c
Rich equates configuration with 3-D design and then says the water is ok.  The court showed no understanding or care for
the historical meaning of either article of manufacture or design.  They could have said Congress meant to change
it, but they didn’t it.
In re Zahn, 1980, drill shank case. The design was the shank
portion; the PTO refused b/c said the entire configuration was the design, not
just the shank.  The court said that was
cool b/c the statute didn’t require an entire article.  This is a watershed—you can be creative in
design patent application. This is where shenanigans start in earnest.  Possibly not aware of relevant history and
precedent. More likely: larger emphasis on periperhal claiming, allowing
applicant autonomy in defining the scope of the claim—the design is what I say
it is.
So what? (1) Important for reading old cases. Don’t assume
that the contemporary rules applied, even if the language is the same.  (2) Current interpretation: are we stuck in a
Zahn world?  No, can note its shaky
historical foundation, lack of inevitability of reading the language in this
way.  Implications for (1) partial
designs, US and int’l; (2) GUI design patents—since this is the basis for
approving such patents; (3) debates over special remedy of full disgorgement.
If we’re reading old cases wrong, may be reading them wrong as to this too.
McKenna: does Apple/Samsung lock us in b/c the Ct has said
that the article of manufacture can be a component—makes it no longer sensible
to talk about partial design if whatever is claimed is the design.
A: not sure that’s what the Ct did. In theory, we could
acknowledge that some components are articles, but we could make you claim the
whole component—the screen, not some corner of the screen.
McKenna: but now can’t I say the article of manufacture is
this corner?
A: in the 19th c. they would have said now.
McKenna: Apple/Samsung is a second-best solution; maybe it
was never necessary in the first place if we shouldn’t have been granting these
patents in the first place—a rearguard attempt to fix problems from Zahn.
A: still interested in distinguishing article of manufacture
from design.
Lunney: always important to know how we got where we
are.  Also important to know it was Judge
Rich—ex parte, w/just a gov’t lawyer and an applicant—shows how these things
can go wrong/off the rails. You may not be able to rewrite, but can tweak way
appeals from PTO are heard.
RT: interesting to put in context of legal thought of the
time: pre-Realist; they thought there were platonic ideals of everything, not
just a design.  Formalism—we don’t have
to abandon that if it’s encoded in the statute. 
[Now I’m thinking about tax doctrine: there’s evasion and avoidance; we
recognize that laws create structures that one must take into account, and some
things are within the statute and others without—especially if a distinction is
made by the legislature, it is acceptable to say that some line must be drawn
and that the legislature could rationally put it in one place even if facts on
the ground are something of a continuum, like a speed limit.]
Stacey Dogan, The Role of Design Choice in Intellectual Property
and Antitrust Law
Issue in both contexts: should law influence the design of
technology/innovation?  Answers differ
depend on political/ideological predispositions in IP and antitrust.  People who are strong advocates of IP rights
are often antitrust skeptics and vice versa. 
Grokster, Aimster, Betamax; Allied Orthopedics, Microsoft—common factor
was courts being asked to look at the design choices made by defendants and
unpack them to figure out whether their choice of design should be impugned b/c
it helped enable infringement or exclude competitors/shore up a monopoly.  The design itself wasn’t independently
unlawful, but allegedly unlawful for role in achieving some unlawful end.
Courts’ starting principle is non-interference.  Or so they say.  Generally leave it up to the market to bless
design.  Non-interference in ©/TM:
substantial noninfringing uses make a product ok; parties need not design
staple products to avoid or minimize infringement; not a cost-benefit
analysis.  Parallel in antitrust: even
monopolists don’t have to design products to make life easier for competitors.
And yet: Grokster, court looks at design as one of the
factors taken into account in determining whether there’d been inducement.  Both technological design and business goals
in designing the system as it did.  In
some antitrust cases, Microsoft and Bard, courts look behind the product to
figure out what motivated particular aspects of the design choices.  Bard biopsy guns: a redesign of the gun was
made w/primary intent of making the gun incompatible w/others’ needles.
Microsoft browser bundling, making it very hard for people to remove it and
substitute Netscape.
Are there common themes or differences across
IP/antitrust?  Common reasons for
non-interference: error costs (impossibility/incommensurability of weighing
value of innovation v. other interests—risks of Type I/false positive errors);
supervision costs (oversight of design—court reluctant to be regulatory
agency); chilling effect & interference w/legit trade.
One reading of Grokster
focuses on intent: to root out ventures that wouldn’t exist but for
infringement.  It’s not actually the acts
of inducement that matter; they are only evidence of intent to induce.  Focus on whether intervention would interfere
w/commerce unrelated to infringement. 
Theory: unlikely to interfere w/future development of tech done by
people w/better motives.  Similar thread
can be found in antitrust cases.  Courts’
starting rule is not to second-guess design choices. Attempts to identify
dimensions of products that have no purpose but to exclude.  Things that made no economic sense except
when exclusionary effects are taken into account. 
Posner is willing to interfere w/design choices in Aimster, whereas he’s hands-off in
antitrust; Michael Carrier is very strong non-interventionist in IP context,
but believes in heavier hand in antitrust context. This reflects normative
views of underlying area of law.
McKenna: we have an entire area of torts based on products
liability—law is perfectly willing to second guess design when there are good
reasons. Why in IP but generally not elsewhere? 
Antitrust, market power tripwire—might be more reason to intervene v. IP
which applies to every actor in the industry.
RT: Ann Bartow’s point: TM/false advertising flip is the
same, where people who like strong TM like limited false advertising liability
and vice versa (it me).  Nature of the
people you’re harming; ability to protect themselves via knowledge or
competition?  So with antitrust we might
say competitors can protect themselves via the market more easily than
consumers w/product design.  Likewise,
the IP cases in which these principles come up are not standard individual
infringement cases; they are cases in which it is clear that it is industry v.
industry, whether or not they’re contributory infringement cases; it’s clear
that big market actors with big structural effects are in play.
Lunney: property v. markets—Posner & Carrier would both
say they’re consistent.  Do they just
weight the values differently? 
A: sure, but interesting to unpack that to figure out what’s
underneath.
Aaron Perzanowski [& Dave Fagundes], Juggalos Without Juggalaws:
The Norm-Based Governance of Clowns
Following up on Dave Fagundes’ work on roller derby; also
Perzanowski’s work on tattoos, w/premium placed on unique designs viewed as
deeply personal in part b/c they’re connected to the human body.
Clown eggs: carefully painted, disturbingly accurate
portraits of clowns painted on chicken eggs, including wool hair and portions
of costumes.  Astounding and maybe
disturbing. Seems to have originated in UK, now known as Clowns Int’l.  Also, disputes about similarity on online
forums (these are awesome).  What norms
spring up: was the registry a response to norms; did it create norms?  How does the registry screen or resolve claims?  Does it play a role in norm enforcement?  Why has the UK registry persisted and the US
registry has not?

Q: what’s the standard of similarity? To the untrained eye, there is not
infinite possibility here.  So how does
that relate to similarity measures elsewhere?
A: good question. There are conventions; 4-5 types of clowns
recognized as genres, so there are constraints on how much you can do and still
be recognized as a clown. We’ll get some of that from interviews.

Sheff: seems more like dilution than confusion—it makes my
entry in this space indistinct b/c similarities are so close but not
exact.  Dilution of a non-strong identity;
as opposed to dilution for famous marks—might provide insight on what dilution
gets wrong.

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WIPIP, part 3

Posted on February 10, 2017 by rtushnet
Carys J. Craig, Relying on (User) Rights-Talk: On Copyright Limits
and Rhetorical Risks
Many ways to limit ©; here focusing on defenses/exceptions,
the ideal type of which is fair use. If our goal is to constrain ©, what should
we be calling these things?  Not a
doctrinal Q as such, but a critical theoretical inquiry—a strategic concern in
Canada and internationally.
Semantics isn’t all. 
There is confusion about the ontology of the nature of “limits,” “exceptions,”
“defenses, “user rights”—how we conceptualize user privileges or freedoms has a
direct bearing on how we define lawful uses w/r/t availability; scope; burden
of proof; conditionality; effectiveness, etc. 
Logic of the reasoning: nothing short of “user right” can trump
proprietary rights of the owner. But will that necessarily serve the interests
of the public or those who hope to constrain ©’s excesses?  Double-edged sword.  Natural rights or individual rights based
claims for © inevitably lead to broader © and undermining public interest—ever-increasing
pool of creations; increasingly restrictive interpretations of defenses.
Canada: due limits to authors’ rights come from users’
rights in fair dealing.  Must not be
interpreted restrictively; user rights are not just loopholes. Necessary for
fairness & balance.  Canadian SCt has
reiterated that it’s serious a few times. 
Int’l implications: Israeli courts had to figure out whether
move to fair use was a move to user right; SCt first said simply a defense, not
a user right, but 2 subsequent cases referred to it as “right.”
US: Patterson & Lindberg, 1999, © as a law of user’s
rights based on 1A.  A few lower court
cases arguing that it is a right granted by the Copyright Act, not merely an
affirmative defense.  But bound by SCt to
apply it as a defense.  Outliers; the
affirmative defense version is the accepted one, dissolved into external
individual rights like freedom of speech.
Int’l treatises still use “limits” and “permitted
exceptions,” even in the Marrakesh treaty which is the first to require
exceptions. Still a lot of mobilization around user rights.
What’s wrong with rights? Metaphorical balancing acts.
Commensurate weight with creators as considerations to be traded off; zero sum
approach.  All interests reduced and
traded off with one another.  Turn into
CLS: they’re just a legal fiction. Critique of the critique: critical race
theorists, who say that they can be useful legal fictions & we should wield
them anyway for our own benefit.
Can cause us to overlook social values, public policy
purposes that should be animating discourse about where the limits of © rely.
We might inadvertently reinforce rights rhetoric in the © domain—it’s hard say “use
rights” for users and then say “use utility” when authors make their rights
claims.
RT: Rights talk literature, e.g., Mary Ann Glendon—an interesting
debate on the right over what IP is and whether it’s a right; Julie Cohen:
rights talk in privacy v. ©.  I end up
mostly rejecting “The master’s tools will never end up dismantling the master’s
house” because it’s not very easy to dismantle the master’s house without them.
Buccafusco: maybe differently useful/harmful in different
contexts?  Public, legislature, judicial
systems?
A: Certainly for critical race scholars—dual consciousness,
where we use them with people who talk rights talk, but we should be aware that
we’re donning that mask & understand ourselves that’s just a game. But we
can’t separate out audiences; rights have a way of becoming real, making it
harder to talk about the values that inform them.
Lunney: more historical reasons on why users’ rights are
popular at this point in time?  [Possibly
Jessica Litman’s work on expansion of ©?] 
Certain desperation in responses to ©’s excesses.  Are we trapping ourselves into something that
will turn on us?  [Consider Jack Balkin’s
concept of ideological drift in this regard.]
A: theory of what © is in Canada—what caused that?  Has to do with tech change, networking of
users, state of © reform, and particular political activists like Michael Geist
mobilizing a user community base.  Politics
of when rights emerge as claims, as argued by Duncan Kennedy: group starts to
recognizes itself as a group in a positive and not just negative way and
formulates a rights claim to be neutral and apolitical.
Said: People who aren’t aware of rights won’t enforce—knowing
that one is part of a group is a privilege.
Martin Skladany, Proposals to Reduce the Harm of Excessive Copyright
Protection That Are Immune to Big Copyright’s Influence
One possibility: Creating a tech union not to argue for
better pay but to argue that Google’s policies on privacy should be different—a
political organization aimed at its boss. 
Do we have any incentives to reduce consumption or increase creation
that don’t involve getting stuff via Hollywood? 
Collective funds to get more revenue into the pockets of artists—a hedge
fund for artists.  Sign a contract
saying, if at any point in next 30 years, they’re called on to deliver 30
pieces of art to the fund, they’ll do so; they’ll only be called on to do so if
they become famous. A small way to chip away against the harms © is
creating.  Not all the ideas are
attacking overconsumption/undercreation; other ideas attack orphan works
problem; other ideas attack low pay for artists.
Most of what we overconsume today has neurological component
explaining why we overconsume—TV’s attentional inertia; online use, various
rewards.
Rosenblatt: Challenge the underlying assumption that
consuming and producing are mutually exclusive—there’s more creative output,
and more high quality output, now than there ever has been before.  Nor is your underlying assumption that more
money à
more creation necessarily true, or that more punishment for noncreation would
create more creation. People don’t like to be compelled to create stuff, in the
long run. 
Skladany: on average that’s not what we’re
watching/consuming.  Not worried about
productive consumers; the prototypical scenario is someone who watches TV and does
not create.  That’s not healthy.
Rosenblatt: maybe he needs more inspiration, and not less Hollywood.
Skladany: © isn’t the main reason; we should be funding lots
of arts education.
Said: would it matter if people were watching 10 hours of “news”
a day?
Skladany: what’s the value of 10 hours a day? Would you want
a 5-year-old watching like that?  Let’s
get rid of lots of © and see where the chips fall.
Buccafusco: what you’re saying is that the general
assumption about consumption and creation is backwards—that consumption in ©,
which we normally treat as leisure, which we usually attempt to maximize, is
bad at least over some tipping point. 
And creation, which is labor, which we typically want to minimize, is
good.  You can make these arguments but
you have to say why—the history of © has been going in another direction, which
is to try to convince people to labor to create © works with the reward of ©.  We spend a lot of time trying to figure out
the appropriate amount of consumption of calories; if you eat too much or too
little you die earlier and can’t eat later; there might be some amount of
consumption of entertainment that’s bad, but what is it?
Skladany: Not a liberal but a perfectionist.  I’m not forcing anyone to create, but if you
don’t create in your life, something is missing.  [I think we all actually agree w/him but are
not sure why these solutions would spur these non-creators (if non-creators
they are) to create.] What is overconsumption? 
I’m not going to commit to X amount of hours.  Calories too depend on other factors. 
Pager: Is the 10 hours the problem or is it the opportunity
cost of those 10 hours?
Skladany: the latter: what else is important in life?  Family, friends, helping others.  [Auden supposedly said: “we are put on this
earth to make things,” but also “we are put on this earth to help other people;
I’m not sure what the other people were put here for.”]
Q: a theory of why people consume 10 hours/day: so when you
meet a stranger or a friend you have a shared experience to talk about
together. Can reinforce social ties. There’s a variety of things that shared
consumption can get you socially.  [Like
fan fiction!]
Skladany: if you’re consuming 10 hours/day, you don’t have
time to work—our consumption often occurs at work, but not if you’re a factory
worker.
Glynn S. Lunney, Copyright’s Price Competition Deficiency
There’s very little price competition for © works: iTunes is
$1.29 or .99; good movie/bad movie you pay one price at the theater; video
games are mostly all the same price when they come out. Aftermarket in used
stock exists, but initially we get the same price. Broadcast TV, you get 12
min/commercials for every ½ of content—the price is the same.  Bundling has different consequences.
Competition—as an economist, we look for cross-elasticity of
demand. Many © works don’t have that kind of competition—you won’t see La-La
Land if the price is 5% less than Rogue One; you wanted to see Rogue One.  Some degree of market power, creating
familiar deadweight loss triangle. Optimal price w/works of varying popularity
is to set different prices to maximize profits/rents. That’s what we use as
incentive in © to reimburse author etc. 
Deadweight cost: exactly half of producer surplus where we have linear
demand curve. 
If you can only charge one price for both that maximizes
total income, you’ll set a different price. 
Get less rent for popular and unpopular works; fail to sell as many of
the less popular works than you should—higher deadweight loss for less popular
works, though lower deadweight loss for more popular works.
Introduction of price competition in the eBook market: some ©
owners set a low price on eBooks—especially first volume in trilogy, new
author.
Initial foray: 50 “best” books from 19th and 21st
centuries; found lowest prices for paper/electronic copies of each.  Lowest price for electronic copies of 19th
C.: zero.  Ave. for print: $5.  You could also find higher-priced
ebooks.  21st century: eBook
price averaged $10; paper $9.  That is
curious. 
Costs of © are therefore higher in a digital environment. ©
enables value-based rather than cost-based pricing—that is, market power.  Charging more for convenience.  We don’t need © to ensure continued
distribution of public domain works, shocker! 
Clumping in both markets: paper, median and mode is $9.52; eBooks,
median and mode is 9.99.  Also more
clumping at eBooks—other prices recurred a lot. 
Buccafusco: lock-in to Kindle?  Tricky to make assumptions about that.  Interested in ideas about extent to which
consumers just don’t know value of works. Often producers don’t know
either.  When most people go to the
movies, they don’t know what they’re going to see—they stand there and
pick.  [So weird.]  They might take price as a signal of quality,
and discount movies that are cheaper.  If
they do that, and if producers are also uncertain about consumer price
sensitivity, then it might be easier to signal that all are high value and
discount later on.  Look at circumstances
where consumers do have well-formed preferences at time of purchases to see if
there’s still price competition?  [Diet
Coke and Diet Pepsi?]
A: doesn’t buy lock-in since most of those prices were from
Google Play. If price is signal of quality, what is the role of other
indicators, like ratings? 
Neel Sukhatme: Initial Q: why have uniform pricing?  Apple knows how to make $ (though it’s money
for Apple, not for the record companies). Uniformity may draw people to the
system.  How do the contracts work?
[Apple; the record companies fought hard for minor price discrimination and
only won after Jobs’s passing.]  Formally
model this: if there’s an error in understanding how much a song is worth,
maybe it makes sense to start off the same for everything and deviate over
time.
Said: doing the daily deal was a full-time job—pushing and
shaping the market, not just consumer demand. 
Always interested in when things are dropping out of licenses and
disappear from Netflix.  Suspect that’s
happening in eBooks.
Eric E. Johnson, Intellectual Property and Growth Economics
Robert Cooter: Rapid economic growth quickly overtakes
static inefficiency in redistribution, as long as it is sufficiently rapid.
Innovation is the most important thing! 
Or maybe the future is so advanced as to be unimaginable.  If we take seriously the idea that tinkering
with IP can cause tech to take off at exponential rates—a very large population
of people living happy lives could be spread all over the universe—that’s a
potential good lost, happy lives, with every year of delay; entropy is
advancing irreversibly or we are sacrificing good lives worth living.  [Oh, for Jeremy Sheff’s commentary on this.]
What’s helpful here? Focus on dynamic efficiency is useful
in broadening our perspectives. 
Criticisms: (1) implementability—how do we distinguish b/t fertile
inventions that give rise to more innovations and thus be kept free and
inventions that should be given IP rights? Cooter says “bring in economists!”
but he also says economists have been wrong up to him.  (2) argument proceeds on unfounded
premises.  He says economic growth
compounds like a dollar in a bank. But that’s different from innovation—how does
innovation compound?  A new class of
molecule might lead to 50 new drugs, but after that the innovation slows—they aren’t
each a new class of molecule.  (3) IP
rights can put the brakes on growth for innovations that foster further
innovations; so what you really need is a lot of incentives, but incentives
that don’t provide market power—government rewards. 
Rosenblatt: are you simply condemning hyperbole?  People who make outsized claims are probably
wrong.  We do fair use in © to identify
uses that are productive—what about doing the same in patent?  Maybe the place to tinker is not in
protectability but in scope.
Lunney: economists’ fixation on greater income may not be
consistent w/flourishing, above a certain level of income. More advanced tech
may not be better tech in terms of human satisfaction.

A: he skips past that and says innovation à
growth and growth is what’s good.

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